Press Release: Economic Crisis Results in Significantly Lower
Potential Output and Labour Productivity Growth for Canada
The Centre for the Study of Living Standards (CSLS), a national, independent,
not-for-profit, economic research organization, today released the latest issue of
the International Productivity Monitor. In the lead article Marcello Estevão and
Evridiki Tsounta from the International Monetary Fund document the evolution of
potential productivity and output growth in the Canadian economy. They find
that the economic crisis resulted in significantly lower potential growth after
2008 because of the fall in investment. By 2015, they project that potential
growth will return to 2.0 per cent, still below the pre-crisis growth rate of 2.6
per cent.
Additional highlights of the issue are summarized below.
Canada’s nearly 30 per cent business sector labour productivity gap with
the United States is not due to less total investment per worker, but to a
lower level of multifactor productivity. This is a key finding in the article
by Jianmin Tang and Someshwar Rao from Industry Canada and Min Li from
Statistics Canada. The authors reach this conclusion by compiling capital
stock estimates for the two countries using the same depreciation rates.
Previous research based on national depreciation rates found that total
capital intensity was lower in Canada than in the United States.
Canada's absymal productivity growth since 2000 is largely explained by
developments in Ontario. This province accounted for 62 per cent of the
country’s slowdown in aggregate economy output per hour growth
between 1997-2000 and 2000-2007, according to Andrew Sharpe and Eric
Thomson from the Centre for the Study of Living Standards. The Ontario
manufacturing sector alone was responsible for approximately one third of
the Canada-wide slowdown.
The table of contents of this issue, with links to the articles, is posted below.
International Productivity Monitor
Number 20, Fall 2010
Masthead
Editor's Overview
Marcello Estevão and Evridiki Tsounta
Canada's Potential Productivity and Output Growth: A Post-Crisis Assessment
Jianmin Tang, Someshwar Rao and Min Li
Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation
Assumptions: A Canada-U.S.
Andrew Sharpe and Eric Thomson
Insights into Canada's Abysmal Post-2000 Productivity Performance
from Decompositions of Labour Productivity Growth by Industry and
Province
Mika Maliranta, Petri Rouvinen and Pekka Ylä-Anttila
Finland's Path to the Global Productivity Frontier through Creative Destruction
Abhay Gupta
Indian Manufacturing Productivity: What Caused the Growth
Stagnation before the 1990s?
For additional information, please contact:
Andrew Sharpe
Executive Director
Centre for the Study of Living Standards
111 Sparks Street, Suite 500
Ottawa, Ontario K1P 5B5
613-233-8891
Fax: 613-233-8250
[email protected]
www.csls.ca